What are the chances of buying a decent house at the court house steps?
Last July, these two youtube videos captured a group of houses on the foreclosure list, and was marked as the ‘Trustee Sale Test Group’, so we could follow up later to see how they did.
The first video shows ten houses in Carlsbad:
Of the ten, five have been sold: 2 short sales, 2 REO resales, and the last was the off-market short sale we saw a couple of days ago. Four others were cancelled, and one still has an auction date looming next week.
In the Carmel Valley video below, the first sold as a short sale for $875,000, Winstanley was foreclosed and is still bank-owned but not on market yet, and the other three cancelled:
Almost a year later, here’s how the 15 fared:
Foreclosed, back-to-bene – 3 (two re-sold, one still held)
Sold Short – 4
Cancelled – 7 (probably loan mods?)
Still on Auction List – 1
The can-kicking program is working well if only half of those on the foreclosure list are actually getting sold. It seems like the loan servicers are moderating the flow pretty well too, so we’ll probably keep seeing the same results – postponements, short sales, cancellations (loan mods), and an occasional deal on the court house steps. (click on the category below, ‘Trustee Sale Test Group’, to see the original posts & comments)
7 out of 15 getting loan mods seems rather high, but if that is true and that sort of ratio is typical, it is good news for the banks and bad news for home buyers.
Let’s note that the owners of nicer homes will probably fight harder to keep them.
“Attmepting” to get loan mods–most strategic defaulters will simply start paying again once they get shut down.
From my view – We track a defined area in SD for daily TS.
In our tracking area we’re averaging 15 homes scheduled for auction as of the AM.
The breakout by day’s end is usually as follows:
9 postponed
2 cancelled
3 bank owned
1 3rd party sale
70%+ postponed/cancelled
20%+ back to bank
5%-10% sold to 3rd party
They’re just giving them away!!!
Jim,
The short sales show up as cancelled trustee sales, so I think that your sample actually relects about 70% cancelled and less than 30% taken to trustee sale.
Whether that ratio changes much in the next 3-6 months as the mod seekers either get mods or get denied will be intereting to watch. How many of those cancellations will reappear as new NTS in the next 12 months is another interesting question.
Clearfund (Steve?),
I’m in LA, and looking at TS to purchase my primary residence, so I’m no competition.
Do you track the different behavior patterns among lenders/servicers? If so, I’d be very interested in your observations. Up here, we seem to have daily outcome ratios of 80-83% postponed, 8-10% cancelled, 7-9% sold, with more than 2/3 of the latter going back to the bene.
Definitely the BofA/Countrwide/Recon bunch appears to be selling the most as a percentage of what they have scheduled each day, while the JPM/Wamu folks are just holding steady compared to 6 months ago, and everyone else is just trickling them out.
Down in SD, it sounds like a higher percentage getting sold than up here.
Sean,
That’s a question, right?
I checked all the cancellations, and they are owned by the same people, and aren’t on the market. Loan mod in progress….for now.
clearfund,
Can you give some parameters of what and where you are looking?
I think we can assume that the nicer the property, the more likely that it won’t be foreclosed. Between all the alternatives the owners who want to stay, probably can find a way.
Only the unemployed and strategic defaulters of the higher quality homes will hit the ‘steps.
When buyers are holding out for the best, it makes for a very narrow opportunity.
Generally speaking I am looking in North county coastal with loan balances above $500k.
Its not worth it to us to buy a small home and make $30k. That is a deal for a contractor based groups.
Sean – We haven’t bothered to formally track the patterns of specific lenders as it doesn’t provide me any benefit.
We track homes, put our value on it, and if it goes up for bid we’re ready and won’t pay $1 over our in-house number.
Thus, the lender info is interesting to blog about, but in the field, it doesn’t benefit me whatsoever.
They will open their bidding where/if they want to independent of us. You just have to be ready to pounce if the rabbit wanders out of the brush, but it may take months.
JTR, I think that house on Obelisco that sold for 1.17M was on the MLS and it was listed for 899k. I remember that house now because when it showed up on the MLS for that price I even mentioned it on piggington and said I would write a check for that price. That was back in May of 2009 and according to zillow it was listed at 899k by Prudential. I think it wasn’t on the MLS very long though and I think they had a buyer by the time they put it up.
The other house you mentioned that sold for 880k on Obelisco Pl was nice but didn’t have as good a view. I put a bid on that at 825k cash and got blown out of the water.
I think that is the nicest street in La Costa. Although 1.17M was probably a steal, the house you mentioned for 1.25M in Pacific Crest was probably just as good a deal if not better because if for no other reason La Costa Canyon High.
Jim,
I bought that calle posada house on a short sale. Was in pretty bad shape. Actually still is. Its my family’s first home and we got a great deal and are doing a total renovation ourselves while we live in it. I see you have a listing just up the street for one of the 1 stories. Anyway, this is a testament that patience and diligence pay off. I had made over 30 offers on homes and finally this one worked and at a great price. Whole process for the short sale approval took three weeks by Chase.